This represents growth of 7,0% on the core earnings, excluding any once-off items, for the six-month period ended 31 December 2016. When compared to the actual dividend of 51,52 cents per share declared for the comparative six-month period ended 31 December 2015, which included a once off non-recurring foreign exchange gain of R23,9 million or 6,69 cents per share, it represents a 6,9% decline.

Nic Morris, CEO of Texton commented, “Adjusting the prior year dividend by the once-off item results in a rebased dividend of 44,83 cents per share which has grown by 7,0%. This growth was achieved from the solid performance of our core South African portfolio and accretive acquisitions successfully concluded in the UK. In addition, the gain made on the realisation of the cross-currency interest rate swap and proceeds property disposals has been reinvested into the business reducing our LTV to 34.5%. The Group has taken the decision not to declare any further once-off distributions and is well positioned to continue to grow of the rebased number.

“We continue to implement our strategy focused on diversification of the portfolio by both sector and geographically in South Africa and the United Kingdom. Low economic growth associated with the current South African environment coupled with economic uncertainty in the United Kingdom will continue to create a challenging operating environment for Texton. Whilst Texton is well positioned to grow off its rebased core earnings, continued pressure experienced by our tenants will need to be closely monitored and managed.”

During the reporting period, the Company progressed with its strategy of disposing of non-core assets, and successfully disposed of five properties with a total combined GLA of 29 096 m2, for an amount of R163,4 million. National, listed and blue-chip tenants increased by 9.2% to 61,3% year-on-year while vacancies have reduced to 6.2% as at 31 December 2016.

“Our core property portfolio is performing well and the team has worked hard to reduce vacancies over the last 8 months to February 2017. The rationalisation of our portfolio is still front of mind and management have made solid progress in disposing of non-core assets,” said Morris.

Current Rand strength has impacted negatively on UK earnings and hedging instruments have been entered into, to protect Texton’s income against downside risk associated with economic and exchange rate volatility. LTV decreased to 34,5% during the reporting period as a result of the disposal of non-core assets and the R123,9 million gain realised on the cross-currency interest rate swap which was used to reduce bank funding.

At the end of the reporting period, Texton owned a total property portfolio of R5,627 billion comprising 54 properties with a sectoral spread by value of 58,6% office, 25,8% retail, and 15,6% industrial.

“Assuming South African property net income growth of 6,0% to 8,0% per annum combined with circa 2,0% property net income growth in the United Kingdom, our total distribution growth, on the rebased dividend, is expected to be between 3.0% to 6.0% for the full year ending 30 June 2017, assuming that the Rand remains below R18,50 to the Pound.

“Texton is currently an externally managed REIT. Consideration regarding the internalisation of the Manco is something the Board of Texton and executive management consider on a regular basis.,” concluded Morris.